Paleo Resources Announces Receipt of Debenture Repurchase Notices and Proposed Shares for Debt Transaction

CALGARY, Alberta, April 08, 2021 (GLOBE NEWSWIRE) -- Paleo Resources, Inc. (“Paleo” or the “Corporation”) (TSX-V: PRE, OTCQB: PRIEF) announced today that the holders of the Corporation’s outstanding 2019 debentures in the aggregate principal amount of CDN$2,682,799 (the “Debentures”) have provided notice to require the Corporation to repurchase all amounts outstanding under the Debentures, in accordance with the terms of such Debentures. The Debentures provide the holders with the right, upon at least 30 days written notice prior to the date that is two (2) years following the original issuance date of such Debentures (the “Repurchase Date”), to require the Corporation to repurchase all amounts outstanding under the Debentures on such Repurchase Date, at a repurchase price equal to 115% of the outstanding principal amount of the Debentures, together with payment of the interest on the principal amount accrued and unpaid to the Repurchase Date. For further information regarding the Debentures, please refer to the Corporation’s news releases ‎dated May 13, 2019, June 5, 2019 and July 25, 2019.

The total principal amount of the indebtedness due as a result of the repurchase notifications is CDN$3,085,218.75 (the “Repurchase Indebtedness”) of which CDN$2,341,681.75 is due on June 5, 2021 and CDN$743,537 is due on July 25, 2021. The Corporation intends to pay in cash all interest due and owing on the Debentures on the respective Repurchase Dates.

Paleo also announced that it intends to settle a total of CDN$2,675,169.10 of the Repurchase Indebtedness through the issuance of an aggregate of 89,172,303 common shares of the Corporation at a deemed price of CDN$0.03 per share (the “Debt Settlement”), subject to approval of the TSX Venture Exchange. The common shares issued in connection with the Debt Settlement will be subject to a hold period of four months from the date of closing.

Roger S. Braugh, Jr. (“Braugh”), a director and officer of Paleo, is the holder of CDN$371,769 of the Repurchase Indebtedness and Chris Pettit & Associates PC, controlled by Christopher J. Pettit, a director of Paleo, as trustee of a Trust (the “Trust”), is the holder of CDN$371,769 of the Repurchase Indebtedness, which would be settled through the issuance of 12,392,285 Common Shares to each at a deemed price of CDN$0.03 per share.